The recent news that the US Justice Department was blocking the proposed acquisition of LSC Communications by Quad Graphics is a turning point for the print media business.
The DOJ Antitrust Division lawsuit says “the transaction would combine the only two significant providers of magazine, catalog, and book printing services” in the market and the outcome would “raise prices and reduce quality at the expense of publishers, retailers, and, ultimately, American consumers.”
Essentially the DOJ decided to intervene to stop the creation of a giant monopoly that would not be good for the printing industry or printing customers.
While there are good reasons to have very large printing establishments in the market, having only one is problematic. A diversity of firms in the magazine, catalog and book printing sectors is important for the long-term health of the entire industry.
This is because customers need to be able to find a printing supplier that is the right size and in the right location for their businesses. The existence of small, medium and large printing companies allows customers to make the choice that works for them.
Our best publication and commercial print customers always tell us that they want a partner that is the right “fit.” What does this mean? It means they want a printing supplier that aligns well the size and scale of their company; a relationship that corresponds to their business philosophy and one with whom they can share trust and confidence.
In other words, for customers who themselves are small or medium size companies, partnering with a giant corporation does not work. With an appropriate supplier fit, customers can always pick up the phone or drive over to the printing facility and talk to the service team or even the owner.
While some customers may have benefited from the Quad acquisition of LSC, most would not. The DOJ decision to block it is, in the long run, better for the industry and the majority of printing customers.
At Printwell, we are committed to keeping our customers informed about important printing industry news and how it impacts their businesses. Please contact your account representative for more information or send us a message here and someone from our sales team will get in touch with you.
